British American Tobacco said in its annual report that more than one in 20 cigarettes smoked worldwide is either smuggled or produced illegally.
About 300 billion cigarettes, or 6 percent of the total market, are illicitly sold each year, said the London-based company. Smuggling and counterfeit cigarettes are a "key concern", BAT Chief Executive Officer Paul Adams said in the annual report.
The illicit trade has grown as the world's population of people over the age of 20 increases, buying demand for cigarettes, BAT said. The figure is equivalent to almost a third of the cigarettes shipped each year by Altria Group, the biggest publicly traded tobacco company, and exceeds Imperial's yearly production of 187 billion sticks. Illicit producers would be the world's fifth-largest cigarette company if considered in a block. BAT said population growth will keep the number of cigarettes smoked worldwide "broadly unchanged" at about 5 trillion through 2015, even as the proportion of adults smoking declines.